Director at the Directorate for Gasification & Use of Gas in Gazprom and also NGVRUS President, Eugene Pronin, gave us a synthetic overview on the current state of NGV in Russia and the related Gazprom strategy. Originally published on “Blue Fuel” – December 2015.
Are the recent revelations around falsified pollution tests on diesel cars a watershed moment for the transport sector and for NGVs in particular?
The Volkswagen case, or “Dieselgate” as some already call it, shows bolt-on technologies are not the answer to reduce emissions from the transport sector. Instead, it is high time we turned our attention to alternative fuels, starting with natural gas which is currently our best option to replace diesel. I hope the recent revelations will be a wake-up call for leaders of the automotive industry to embrace natural gas as a solution fuel for their sector and boost the production of natural gas vehicles (NGVs).
How can NGV provide consumers with an alternative to diesel cars, but also to other green solutions – such as electric cars?
Natural gas as a motor fuel offers significant advantages over traditional fuels, and indeed over other “alternative” fuels. NGVs are clean – they emit 25% less carbon dioxide than petrol vehicles and 95% less nitrogen oxide and produce virtually no particulate emissions. Gas vehicles also make much less noise. Most importantly, this alternative energy is available immediately: petroleum motors can simply be replaced by natural gas motors. Yet, to date, petroleum fuels still provide for almost 92% of the total energy used by the transportation sector globally. Natural gas does not compete with other alternative fuels, such as synthetic methane, electric power or hydrogen, which also have a significant role to play in the transition to sustainable mobility. In fact, theses fuels are complementary as each of them has its own specificities.
What is the state of the global NGV market and in Europe?
We have observed significant growth of the global NGV market in the last decade. Since 2004, the population of NGVs has increased six-fold globally and 2,5 times in Europe. Italy and Germany are the leading markets for NGVs in Europe, now followed by Sweden, the Czech Republic, Bulgaria, Switzerland, and France. The competitiveness of natural gas is among the factors explaining this positive evolution: regardless of the recent fall of oil prices, compressed natural gas (CNG) and liquefied natural gas (LNG) remain the cheapest transportation fuel in Europe at the moment.
What about Russia?
The Russian NGV market is growing too, thanks to a very strong impetus given by the Russian government in 2013 when it set ambitious targets for 2020. At least 5000 new CNG and LNG filling stations are planned for construction by major network developers, half of which will be built by Gazprom. The Russian NGV sector is expected to create 20,000 new jobs by 2020. The Russian government is providing the necessary incentives for these investments to take place via subsidies and reduced tax rates.
In this context, what is Gazprom’s strategy for NGVs?
Gazprom is the leader in the NGV market in Russia today. It is actively working on developing this segment both in Russia and internationally, leading various initiatives to promote the use of NGVs. Gazprom Group is currently operating 34 CNG filling stations in Germany, 14 in the Czech Republic and two LNG stations in Poland. Thirty-nine more stations will be added to the network by the end of 2016 in these countries as well as in Slovakia, Hungary, and Croatia. To promote CNG and LNG, Gazprom Export and E.ON joined forces to organize the 9th Blue Corridor Rally from 24 May – 3 June 2015, bringing together natural-gas-powered vehicles for a tour from St Petersburg to Paris.
What are the prospects for developing the use of LNG in the shipping sector?
It is definitely a sector with great potential, as LNG is the only clean and cost-efficient alternative to oil for ships. Using LNG to fuel commercial ships is a must if the EU wants to meet its new shipping emissions standards. It also has a promising future outside Europe, in countries such as China, South Korea or the United States which are building and operating more and more LNG-powered ships and boats. According to DNVGL experts, the world fleet of LNG ships may increase ten times by 2020. To promote this trend, in June 2016, the 10th edition of the Blue Corridor NGV Rally – named ‘Amber Road’ – will drive through the Baltic sea-ports to encourage the use of LNG for bunkering.
What is your message to the leaders who will meet in Paris for COP21?
Air and water pollution recognises no boundaries. It is therefore necessary to join efforts and intensify the international dialogue and cooperation to promote investments in the NGV sector. The technology is already available and mature. Now, we need political will and to provide investors across the value chain with support to develop the market through fair market rules and concrete incentives.